We think that the government’s second round of chicken price negotiations was more favorable for Thai chicken operators due to relaxation of conditions such as pegging live chicken to the Bt40/kg farmgate price through Chinese New Year and adjusting up some dissected chicken parts price by Bt5/kg. We are positive on “chicken” with a TRADING BUY call on GFPT, CPF and TFG.
Fixed live chicken price at Bt33.5/kg dropped, thankfully
On Jan 17, the Department of Internal Trade (DIT) had a second round of discussions with relevant parties such as Thai Broiler Raising Association, Thai Broiler Processing Exporters Association, large-scale chicken producers and modern traders and reached the following conclusions—1) using the current live chicken farmgate price of Bt40/kg until the Chinese New Year (Jan 30-Feb 1) to alleviate the high feed cost burden for small-scale chicken farms and abolishing the Jan 11 solution of fixing the live chicken price at Bt33.5/kg for six months and 2) fixing the retail (not wholesale) prices for the whole chicken and dissected chicken parts at a Bt60-75/kg range—whole fresh chicken at Bt60-65/kg, thigh-to-drumstick meat at Bt60-65/kg, thighs or drumsticks at Bt65-70/kg and breasts at Bt70-75/kg until the situation normalizes (against its previous solution of fixing the whole fresh chicken, thighs or drumsticks at Bt60-65/kg and breasts at Bt65-70/kg for six months).